The International Monetary Fund (IMF) lowers El Salvador’s GDP growth forecast for 2022

By Karla Ramos  |  Oct 12th, 2022
San Salvador
San Salvador Metropolitan Area.

The International Monetary Fund (IMF) lowered the 2022 Gross Domestic Product (GDP) outlook for El Salvador from 3% to 2.6%. It also reduced the 2023 GDP outlook from 2.3% to 1.7%. It also lowered the 2023 GDP outlook from 2.3% to 1.7%.

El Salvador’s GDP growth projections updates
Report Date 2021 2022 2023
October 2022 10.3 2.6 1.7
May 2022 10.3 3.0 2.3

According to the IMF October 2022 report, El Salvador has the lowest GDP outlook in the region. Panama’s GDP is at 7.5%, Costa Rica’s at 3.8%, Nicaragua at 4%, Guatemala at 3.4%, and Honduras at 3.4%.

The world’s growth prospects for 2023 have also been lowered by 0.2% to 2.7%. According to the IMF, the global economy will continue to face challenges stemming from the conflict in Ukraine and persistent and rising inflationary pressure.

The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook. Global growth is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023.” International Monetary Fund IMF.

The October report indicates that Latin America and the Caribbean will grow by 3.5% in 2022. In 2023, the region will be dragged down by poor data from its trading partners, down 1.7%.

“Inflation remains the most immediate threat to current & future prosperity by squeezing real incomes & undermining macro stability. Central banks around the world need to keep a steady hand with monetary policy firmly focused on taming inflation.” Pierre-Olivier Gourinchas, Chief Economist, International Monetary Fund